South Africa’s 2026 Budget: Godongwana Aims for Credit Rating Upgrade

South African Finance Minister Enoch Godongwana is expected to present a budget on Wednesday, February 26, 2026, that demonstrates improved public finances and potentially paves the way for a sovereign credit rating outlook upgrade. Economists project the National Treasury will achieve a consolidated fiscal deficit of 4.4% of gross domestic product for 2025–26, better than the forecasted 4.7%.

Positive Outlook for Credit Ratings

A Bloomberg survey indicates that six of nine economists anticipate Fitch Ratings will revise its outlook to positive at its next review. Four economists predict a similar move by Moody’s Ratings, although Standard Chartered expects both agencies to shift to a positive outlook. This expectation follows S&P Global Ratings’ upgrade of the country’s credit rating to BB – two steps below investment grade – with a positive outlook in November.

Fiscal Progress and Revenue Performance

Razia Khan, Chief Economist for Africa and the Middle East at Standard Chartered, emphasized the positive developments in South Africa, stating, “You can’t ignore the positives in South Africa.” She anticipates confirmation of fiscal progress and potential revenue outperformance, driven by strong prices for gold and other precious metals [Reuters].

Economic Growth and Debt Stabilization

The Treasury is also expected to meet its target of stabilizing debt this fiscal year. Economists forecast South Africa’s economy will grow 1.6% in 2024 and 1.3% in 2025, marking a recovery from a decade of stagnation. While some, like Jeffrey Schultz of BNP Paribas, believe an outlook change may await the Medium-Term Budget Policy Statement later in the year, the overall trend points towards improvement.

Reforms and Inflation Targets

A positive revision in credit ratings would acknowledge South Africa’s progress in key reforms, including improvements to logistics and energy networks, debt management, and the reduction of the inflation target to 3% – aligning it with trading partners.

Enoch Godongwana’s Background

Enoch Godongwana has served as the Minister of Finance since August 2021 [National Treasury]. He is a member of the National Executive Committee of the African National Congress (ANC) since 1997 and holds an MSc degree in Financial Economics from the University of London [South African Government]. Prior to his current role, Godongwana held various positions in government and the trade union movement, including serving as the General Secretary of the National Union of Metalworkers of South Africa from 1993 to 1997 [Wikipedia].